The Supplemental Security Income Program and Incentives to Claim Social Security Retirement Early: Empirical Evidence from Matched SIPP and Social Security Administrative Files
by Elizabeth Powers and David Neumark
WP 2003-036
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Features of the Supplemental Security Income (SSI) program and the social
security retirement system interact to create incentives for prospective participants in the
aged portion of SSI to withdraw from the labor force and make an early old age insurance
(OAI) claim under social security. This paper takes a first close look at this SSI-OAI
interaction. The work disincentives posed by SSI rules and the potential interactions
between the SSI and social security programs are outlined in a basic theoretical
framework. The impact of SSI rules on the financial cost of delaying the initial OAI
claim is calculated using earnings records of actual SSI recipients. Regression
specifications for early OAI claims that include variables intended to capture the
influence of SSI are estimated. Throughout, the analyses are enhanced by access to
Social Security Administration records that have been matched to individuals in the
Surveys of Income and Program Participation.
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